Transactions can occur when various types of people or groups exchange goods, services, property, time, or money with each other. A transaction can occur when a person selects a good or service from a business and gives the business money or another form of payment in exchange for the good or service. Examples include services or goods provided to a consumer by a realtor or other independent contractor in exchange for money. A transaction can also occur between consumers—persons that are not associated with a business. For example, one consumer might sell or rent his or her home to another consumer or obtain services such as childcare, real estate agent representation, and home improvements, from another consumer.
Increasingly, consumers exchange goods and services with other consumers over the Internet or another network. A seller might list information associated with a good or service he or she wishes to sell on an Internet web site. A potential buyer can review the information and contact the seller via the Internet or offline to arrange the purchase of the good or service. Some Internet web sites require the buyer to submit payment for the good or service to the web site provider. The website provider, after verifying acceptable payment, instructs the seller to send the good or provide the service to the buyer.
Buyers and sellers entering these types of transactions, both online and offline, do not personally know each other typically and, thus, experience a certain level of risk that one of the parties will not or cannot perform the obligations he or she promises during the transaction. For example, a buyer might represent that he or she has the necessary financial resources to complete a transaction, causing the seller to remove goods or services from a listing service in anticipation of selling them to the buyer, even when the buyer does not have such resources. A potential buyer might indicate an interest in a seller's house that causes the seller to take time to arrange a showing of the seller's house to the potential buyer when, in fact, the potential buyer does not have the financial resources to purchase the seller's house. Sellers of services such as childcare may have a track record of failing to adequately perform the service or have a criminal or otherwise questionable background that would cause the buyer of the services to select a different service provider. Sellers of goods could have a history of failing to provide the goods to the buyers after receiving payment for the goods.
Such information may be unavailable to a party involved with a transaction. Without such information, buyers and sellers are assuming a certain level of risk. Some transaction systems provide information about a seller's past performance with other buyers using the system. For example, Amazon's® seller rating system allows buyers who have purchased goods from the seller to rate and post comments about the seller's performance during the transaction. Potential buyers can review the ratings and feedback in determining whether to enter a transaction with the buyer. Such systems, however, do not provide a rating system based on objective data such as credit score, criminal record, employment history, and/or income history that can help the party to determine the risk associated with entering a transaction with the other party.
A system and method is desirable in which a risk rating associated with a subject can be determined. A system and method is also desirable that can provide the risk rating to a party contemplating entering into a transaction with the individual associated with the risk rating. A system and method is also desirable for providing a transaction guarantee that includes a certain level of insurance that would compensate the other party involved in the transaction if the individual for whom the risk rating is determined fails to perform his or her obligations under the transaction.